East of Suez Market Update 19 May

Most prices in East of Suez ports have moved up, and bunker operations at Zhoushan’s outer anchorages resumed today after rough weather halted deliveries yesterday.

IMAGE: Ships and cranes at the port of Dalian, China. Getty Images

Changes on the day to 17.00 SGT (09.00 GMT) today:

• VLSFO prices up in Zhoushan ($18/mt), Singapore ($16/mt) and Fujairah ($12/mt)
• LSMGO prices up in Singapore ($17/mt) and Zhoushan ($6/mt), and down in Fujairah ($13/mt)
• HSFO prices up in Zhoushan ($28/mt), Singapore ($11/mt) and Fujairah ($3/mt)
• B30-VLSFO price up in Singapore ($29/mt)

Zhoushan’s VLSFO price has risen by $18/mt, marking the steepest increase among the three major Asian bunker ports. Even after the increase, Zhoushan’s VLSFO price remains at discounts of $89/mt to Fujairah and $12/mt to Singapore.

Several suppliers in Zhoushan are still facing bunker delivery backlogs caused by adverse weather, although overall fuel availability remains normal amid subdued demand, a trader said. Recommended lead times for VLSFO remain broadly steady from last week at around 5-7 days.

Bunker deliveries at Zhoushan’s Tiaozhoumen and Xiazhimen outer anchorages resumed this morning after being suspended yesterday due to bad weather conditions, according to a source.

Supply conditions across northern China remain uneven. Dalian and Qingdao have sufficient availability of VLSFO and LSMGO, although HSFO supply remains tight in Qingdao. In Shanghai, VLSFO and HSFO availability is constrained, while LSMGO supply remains comparatively stable.

Further south, availability of both VLSFO and LSMGO remains limited in Fuzhou. Xiamen continues to have adequate VLSFO stocks, although LSMGO supply is tighter.

Brent

The front-month ICE Brent contract has gained by $0.35/bbl on the day, to trade at $110.39/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

Brent crude’s price has held steady as ongoing negotiations between Iran and the US remain strained.

The White House said a proposal delivered by Iran on Sunday “lacked any meaningful improvement” from previous versions, according to ANZ Bank’s senior commodity strategist Daniel Hynes.

The remarks come after US President Donald Trump threatened to resume military action against Iran while maintaining the US blockade in the Strait of Hormuz.

The oil market “remains extremely sensitive to Iran-related headlines amid current supply disruptions,” two analysts from ING Bank noted.

Downward pressure:

Brent crude’s price has felt some downward pressure after Trump backtracked from his earlier hardline remarks to resume strikes on Iran.

The shift in Trump’s plan comes at the request of the Saudi Arabia, Qatar and the UAE, he claimed.

Oil prices pared some gains “after President Trump said he had called off a military attack on Iran due to serious negotiations taking place,” Hynes added.

By Tuhin Roy and Aparupa Mazumder

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